RTTN: Crude Up but Market Cautious Ahead of US Election
LONDON--Crude-oil futures are higher in London trading Tuesday, but within a fairly narrow range as the market holds its breath ahead of the U.S. presidential election.
A win for President Barack Obama will likely see continued "ultra-loose monetary and fiscal policy" giving buoyancy to oil prices, Commerzbank said in a note to clients. A Mitt Romney victory would lead to "less-expansionary monetary and fiscal policy" and an increase in domestic production, causing oil prices to fall, the bank said.
At 1030 GMT, the front-month December Brent contract on London's ICE futures exchange is up 60 cents at $108.33 a barrel.
The front-month December light, sweet crude contract on the New York Mercantile Exchange is trading 47 cents higher at $86.12 a barrel.
VTB Capital, in a note, said the market is also bracing itself ahead of the once-in-a-decade power transition in China, the world's largest oil consumer.
The global macroeconomic picture, which helps determine demand for oil, is also mixed. Further stimulus is expected in China, uncertainty is dragging on the euro zone, and there is an improving picture in the U.S., VTB said.
On the supply side there is a continued lack of visibility in the North Sea, with traders waiting for loading programs to see if oil from the giant Buzzard field will return to the market, JBC Energy said in a note. An extended period of maintenance has cut some 220,000 barrels a day of crude from the market.
Elsewhere, South Sudan has said it may resume exports in the next four weeks after a year-long outage, potentially allowing up to 350,000 barrels a day to flow back onto the market.
Later in the global day the first of two weekly U.S. oil inventories reports are published. Usually watched closely by the market, the API and DOE statistics are expected to be skewed by the effects of Hurricane Sandy on the U.S. refining industry, with an expected increase in crude stocks and a fall in refined product stocks.
JBC Energy said the next week's figure will be more interesting.
The ICE's gasoil contract for November delivery is up $14.50 at $937.00 a metric ton, while Nymex gasoline for December delivery is up 226 points at 2.6428 a gallon.
Write to Ben Winkley at ben.winnkley@dowjones.com
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